l
OMo
ARc
PSD|
1
1
629
741
ECO401-
FINALTERM-
NOTES2021\
2022
, SHORTNOTESECO401-LCTURE2
E 3TO35PREPAREDBYMR. SAI
FURR EHMAN
(MC110201030).
MBA
SEME R4
STE ).
GMAI.
LSAI
FGI
LL1@GMAI
L.COM MOBI
LE:
03007252038
MRPL =
Tot
alorf
ix
edc
ost
/Qu
ant
it
y
=MPPLxMRi
=
Margi
nal
soci
alcos
t–Marg
ina
lpri
vat
ecost
V M
AC(
avP
e
raL
g
ec=
M
o
stPPL
)
xPi =v
alu
eofgoodspr
odu
ced–costofmat
eri
al
san
dsu
ppl
i
esu
sedi
n
Ma
rgi
nal
Ext
ern
alc
ost
p
rod
uci
ng.
Va
luea
dde
d
GDPi
sth
etot
alma
rke
tva
lueofa
llf
ina
lgood
san
dse
rvi
cesp
rod
uce
d
wi
thi
nth
epol
i
ti
cal
bou
nda
rie
s.
F
act
orPr
ice
i
sap
ric
eatwh
ichf
ir
mse
lli
tsf
ina
lou
tpu
ttoc
ons
ume
r.
Ma
rke
tpr
ice
=F
act
orp
ric
e+i
ndi
rec
tta
xes
Gros
sNa t
ional
Produ
ct:
canbeobt
ain
edbyal
lfi
nalgood
sandser
vi
ces
pr
oduce
dduri
ngaye
arbyf
act
orsown
edb yt
hec
it
izenofacou
ntr
y.GNP=
GDP+n
etf
act
ori
ncomef
roma
broa
d
Ne
tDo
mes
ti
cPr
odu
ct Ne
tNa
tio
nal
Pro
duc
t:Na
tion
ali
ncomei
sNNP.
Iti
sGNPa
dju
ste
d
f
ord
epr
eci
ati
on.
L
ikeNDP,
NNPi
same
asu
reofn
etp
rod
uct
ioni
nth
eec
onomy
.
=GDP–De
pre
cia
tion
NNP=GNP–Depr
eci
ati
on
Na
ti
ona
lIn
come
:-I
tisof
tenr
efe
rre
dtoa
sNNP.
Tot
ali
ncomee
arn
edb
yth
eci
ti
zen
sof
Nat
ional
Econ
omy
.It
sgov
ern
men
tof
fi
ci
alme
asu
reofh
owmu
chi
ncomei
sge
ner
ate
dby
ec
on omy.
PRI
CEDE
FLATOR:
-Pr
oce
ssofc
onv
ert
ingn
omi
nal
GDPi
ntoRe
alGDPi
skn
own
d
efl
ati
on.
GDPp
ric
ede
fla
tori
sus
edt
oani
ndi
cat
orofe
con
omy
’s
a
ver
agep
ric
ele
vel
.
GDPDe
fla
tor=Nomi
nal
GDP/
Rea
lGDP
REALGDPyeara=Nomi nalGDPyearax(
pri
ce
i
ndexbaseyear/Pr
ic
ein
dex
yea
ra)No mi na
lGDP
=TotalQuant
it
yofgoods&serv
icesPr
oduc
e d
xPrev
ail
ingPri
ceLev
e l
GROWTHRATEI NNOMI NALGDP:-nomi
nalGdpi
nye
ar2
-nomi
nal
Gdpi
nye
ar
1/n
omin a
lGDPy e
ar1
Ma
rgi
nal
Pro
pen
sit
ytoCo
nsu
me(
MPC):ext
raa
mou
ntt
hatp
eop
lec
ons
ume
OMo
ARc
PSD|
1
1
629
741
ECO401-
FINALTERM-
NOTES2021\
2022
, SHORTNOTESECO401-LCTURE2
E 3TO35PREPAREDBYMR. SAI
FURR EHMAN
(MC110201030).
MBA
SEME R4
STE ).
GMAI.
LSAI
FGI
LL1@GMAI
L.COM MOBI
LE:
03007252038
MRPL =
Tot
alorf
ix
edc
ost
/Qu
ant
it
y
=MPPLxMRi
=
Margi
nal
soci
alcos
t–Marg
ina
lpri
vat
ecost
V M
AC(
avP
e
raL
g
ec=
M
o
stPPL
)
xPi =v
alu
eofgoodspr
odu
ced–costofmat
eri
al
san
dsu
ppl
i
esu
sedi
n
Ma
rgi
nal
Ext
ern
alc
ost
p
rod
uci
ng.
Va
luea
dde
d
GDPi
sth
etot
alma
rke
tva
lueofa
llf
ina
lgood
san
dse
rvi
cesp
rod
uce
d
wi
thi
nth
epol
i
ti
cal
bou
nda
rie
s.
F
act
orPr
ice
i
sap
ric
eatwh
ichf
ir
mse
lli
tsf
ina
lou
tpu
ttoc
ons
ume
r.
Ma
rke
tpr
ice
=F
act
orp
ric
e+i
ndi
rec
tta
xes
Gros
sNa t
ional
Produ
ct:
canbeobt
ain
edbyal
lfi
nalgood
sandser
vi
ces
pr
oduce
dduri
ngaye
arbyf
act
orsown
edb yt
hec
it
izenofacou
ntr
y.GNP=
GDP+n
etf
act
ori
ncomef
roma
broa
d
Ne
tDo
mes
ti
cPr
odu
ct Ne
tNa
tio
nal
Pro
duc
t:Na
tion
ali
ncomei
sNNP.
Iti
sGNPa
dju
ste
d
f
ord
epr
eci
ati
on.
L
ikeNDP,
NNPi
same
asu
reofn
etp
rod
uct
ioni
nth
eec
onomy
.
=GDP–De
pre
cia
tion
NNP=GNP–Depr
eci
ati
on
Na
ti
ona
lIn
come
:-I
tisof
tenr
efe
rre
dtoa
sNNP.
Tot
ali
ncomee
arn
edb
yth
eci
ti
zen
sof
Nat
ional
Econ
omy
.It
sgov
ern
men
tof
fi
ci
alme
asu
reofh
owmu
chi
ncomei
sge
ner
ate
dby
ec
on omy.
PRI
CEDE
FLATOR:
-Pr
oce
ssofc
onv
ert
ingn
omi
nal
GDPi
ntoRe
alGDPi
skn
own
d
efl
ati
on.
GDPp
ric
ede
fla
tori
sus
edt
oani
ndi
cat
orofe
con
omy
’s
a
ver
agep
ric
ele
vel
.
GDPDe
fla
tor=Nomi
nal
GDP/
Rea
lGDP
REALGDPyeara=Nomi nalGDPyearax(
pri
ce
i
ndexbaseyear/Pr
ic
ein
dex
yea
ra)No mi na
lGDP
=TotalQuant
it
yofgoods&serv
icesPr
oduc
e d
xPrev
ail
ingPri
ceLev
e l
GROWTHRATEI NNOMI NALGDP:-nomi
nalGdpi
nye
ar2
-nomi
nal
Gdpi
nye
ar
1/n
omin a
lGDPy e
ar1
Ma
rgi
nal
Pro
pen
sit
ytoCo
nsu
me(
MPC):ext
raa
mou
ntt
hatp
eop
lec
ons
ume
